Why does Taleb argue for a barbell investing strategy?

Taleb argues for a barbell investing strategy because he believes over-engineering of the global financial markets, leverage and how interconnected all the banks are makes the system less robust and more fragile. Thus, smaller shocks to the system get exacerbated more frequently.

What is the barbell strategy?

Wealth creation is about looking for positive asymmetric opportunities - ones where the upside is many times greater than the downside. The Barbell Strategy is one way you can protect your downside risk while maximizing your upside potential. What’s the Barbell Strategy?

Should you choose a barbell strategy or a middle-of-the-road investment?

Barbell Strategy Pros Potentially higher returns: If your extremely high-risk investments pay off, you could see higher returns than a middle-of-the-road investor. Manage your risk: Selecting both investments with different amounts of risk can help you keep your overall portfolio risk lower.

Can a barbell strategy mix stocks and bonds?

The barbell strategy can also mix stocks and bonds. There are several risks associated with using a barbell strategy, such as interest rate risk and inflation risk. The barbell strategy will have a portfolio consisting of short-term bonds and long-term bonds, with no intermediate bonds.